AirAsia delivers best quarterly net profit

PETALING JAYA: AirAsia Group Bhd delivered its best quarterly net profit ever, as passenger traffic grew 16% to 10.65 million in the first three months of the year.

Profit after tax climbed 86% to RM1.19bil, while revenue rose 15% to RM2.56bil.

Group CEO Tan Sri Tony Fernandes, in a statement, announced that the company was paying an interim dividend of 12 sen a share.

“This quarter was a strong quarter for us, which shows a good start to a full year of positive results,” he said.

Revenue growth was supported by a very strong load factor of 87% and a 16% increase in passengers carried.

Net operating profit, excluding a one-off gain, was up by 9% to RM309.3mil despite higher overall costs in fuel, aircraft operating lease expenses and overall aircraft maintenance and overhaul expenses.

Operating cash flow for the quarter under review was at RM371.4mil and net cash flow at RM170.5mil. This cash position lowered AirAsia’s net gearing ratio to 0.9 times as compared to 1.11 times at the end of 2017.

“Across the whole group, we added 31 aircraft as compared to last year this time. Despite the vast capacity added, we did not lose pricing power on fares.” Fernandes said.

On his outlook for the second quarter, Fernandes said the focus is to keep cost down.

AirAsia, Fernandes said, would actively reduce loss-making routes while increasing the frequencies of the profitable sectors. The company is also focusing on increasing its aircraft utilisation rate.

“We want to further improve the turnaround time and overall performance by each AOC,” he said.

“As for fuel, we will adhere to our policy by actively hedging according to our forward bookings. Our ancillary and data services will be revenue enhancing while off-setting higher fuel prices,” he said.

AirAsia, Fernandes said, would continue to create valuable assets and monetise its investments in non-core businesses.

“We will continue to pay a biennial distribution of special dividends from these businesses. We will soon be announcing a special dividend for the sale of our aircraft leasing operations, Asia Aviation Capital Ltd,” he said.